The Sensex and Nifty snapped their nine-day gaining streak on Wednesday with banking and consumer durables stocks logging maximum losses on Dalal Street even as global cues were positive.
Banking stocks were hit after RBI deputy governor NS Vishwanathan defended a revised framework for expeditious resolution of bad loans notified by the central bank on February 12, 2018.
Investors preferred to book profits on the consumer durables counter which saw record highs yesterday buoyed by the RBI's normal monsoon forecast.
While the Sensex closed 63 points lower at 34,331 level, the Nifty fell 22 points to 10,526.
The Sensex had risen 1,375.99 points, or 4.17 per cent in the previous nine sessions.
The Nifty gained 420.30 points, or 4.15 per cent in the past nine sessions.
The BSE bankex dragged the Sensex and Nifty in the red after it fell 241 points (0.85%) to 28,158. Bank Nifty too closed 0.92% or 232 points lower to 25,102 level.
On Tuesday, the BSE consumer durables index which rose 1.05% (over 250 points) to 23,038 on expectations of a normal monsoon saw profit booking and fell 1.18% or 272 points to 22,765 level in today's trade.
Sameet Chavan, Chief Analyst, Technical and Derivatives at Angel Broking said, "We are not surprised by today's sharp cut as we have been continuously advocating about staying light if index enters the strong resistance zone of 10580 - 10640. Not necessarily we may start correcting right from this point, but one should take this as a warning and hence, in case of yet another attempt towards 10580 - 10640, it would be an opportunity to take some money off the table. Today, there was clearly some gush seen from the traders' fraternity as they turned skeptical around the 10600 mark. Such moves are now quite evident and hence, we expect some volatility with such kind of ambiguity to continue. Traders are advised to stay light and concentrate mainly on individual stocks."
Axis Bank (2.60%), M&M (1.55%) and IndusInd Bank (1.23%) were the top losers on the Sensex.
TCS, which will report its Q4 earnings on Thursday closed 0.20% lower at 3159 level on BSE.
Market breadth was negative with 1131 stocks closing higher against 1527 ending in the red on BSE.
Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund said, "Market sentiment these last few days has been fairly benign. With volatility coming to the fore, no clear trend seems to be emerging for now. Domestic markets started the day on a positive note and drifted higher in early trade only to succumb to volatility and consequently swing between the positive and negative zone, through the day. Mirroring the wider market sentiment, sectoral performance on the National Stock Exchange (NSE) was mixed. While the FMCG and media indices gained over 1% in trade today, the banking, auto and IT indices witnessed selling pressure."
Markets followed Wall Street higher on Wednesday despite a Chinese tariff hike on U.S. sorghum in a swelling trade dispute with Washington.
In early trading, London's FTSE 100 rose 0.7 percent to 7,278.02 and France's CAC 40 added 0.5 percent to 5,379.95. German's DAX advanced 0.3 percent to 12,630.42. On Tuesday, the DAX climbed 1.6 percent, the CAC 40 rose 0.8 percent and the FTSE 100 added 0.4 percent. On Wall Street, futures for the Dow Jones industrial average and Standard & Poor's 500 index gained 0.1 percent.
The Shanghai Composite Index gained 0.8 percent to 3,091.40 and Tokyo's Nikkei 225 rose 1.4 percent to 22,158.20. Hong Kong's Hang Seng advanced 0.7 percent to 30,284.25 and Sydney's S&P-ASX 200 added 0.3 percent to 5,861.40. Seoul's Kospi gained 1.1 percent to 2,479.98 and India's Sensex edged up 0.1 percent to 34,435.59. Benchmarks in Taiwan, New Zealand and Southeast Asia also rose.